Customers are an important part in the success of a product

NMD: When did you start operations in India?

SD: We came to India in 1988. We were here initially through two agents, but in 1990 we terminated that arrangement and started our own representative office in India, a laision office. In 1996, we incorporated Nordson India. Since then we have been a wholly-owned Indian company.

 

NMD: You have been engaged in the gluing systems in packaging segment. What are the innovations that have happened over the years?

SD: It’s a long history. When I started this business 25 years ago, nobody knew what hotmelt was. A few people did know. But the industry was using fairly (I don’t want to use the wrong word) primitive technologies. We tried very hard for the first couple of years to bring new technologies to the packaging industry and I think the conclusion we drew quickly was that the industry just wasn’t ready.

 

NMD: Which are the companies which adopted it early on?

SD: I would say that the real growth in this kind of industry started in about 1993 or 1994 with the large multi-national companies who are familiar with these technologies globally. So, one of our first major packaging customer was Colgate Palmolive. They were looking at tamper-evident solutions for their toothpaste. They looked at different technologies for getting around this problem.

 

NMD: How did they use your technology?

SD: I don’t know if you remember when cartons used to be tucked in, the flap of the carton was tucked in and you could open it, take out the product and you could tuck it back in. So, you could do whatever you like and nobody could be any wiser. They moved away from tucked in carton to a glued carton where if you open the carton, it becomes evident that it has been tampered with or opened.

 

So, Colgate was our early customer. And then of course, everybody else followed. And today, I don’t think you can get a carton of toothpaste in India which is not sealed with hot-melt. And virtually all of them are done with our machines. So, we were the first movers in this business. We took the technology to the customers and showed them what benefits they could get.

 

Once the technology was absorbed, others wanting to use hotmelt came up with different applications. Today, there are a vast number of adhesive applications in packaging that are being done in India.

 

NMD: So in each of them, there is some role of Nordson?

SD: Yes. Our business in this thing is the dispensing of the adhesives. What our machines do is dispense accurate quantity of adhesives at the right place, and in a very controlled way, which includes controlling the temperature, pressure, timing, location, and so on. It’s pretty complicated.

All this is to ensure that no defective product leaves your factory. The cost of a failed product is not the cost of the product. There are many costs surrounding the product, which can be more expensive – the cost of your brand, is a major one. So, if you go into the super market and you find a brand of biscuits where you got 10 cartons on the shelf, three of them are open, you are not going to buy that. Then you are going to make a mental note of the quality of the packaging and that mental note unfortunately is attributed to the quality of the product. So, the cost of a failure is very high.   

 

NMD: When a particular application like the one with Welbound’s HC 500, the idea of innovation comes from you or someone like Welbound?

SD: It can come from either place. Frequently, it comes from a customer’s pre-conceived product need. We discuss the project with the customer, elicit their opinions on what problems they face.

 

Now, let’s say there is customer who is making spices. They are experts in making spices; they really may or may not have knowledge of packaging technologies. So, when we go and talk with a customer who is making spices, we discuss the problems and develop an idea.

 

Honestly, the success of any product innovation comes from many sources. The customer might trigger an idea. Somebody like a material supplier might trigger an idea or somebody like P Sajith of Welbound, who makes the OEM equipment.

 

Now, in a particular situation, you can’t just give a solution and think it will work. It may not work. So, for any serious player in this business, you need to have a pretty well-equipped laboratory where ideas of this sort can be incubated, tried, tested, and then they are commercialised. We have a Nordson laboratory in Bengaluru, arguably, one of the best in the country.

 

NMD: Who do you attribute the success of a product that’s developed by your intervention?

SD: Essentially, you need four different parties to make this game work. The first and most important party is the end-user – the customer. So, somebody is making spices – that party is the most crucial guy. Then you may or may not have a manufacturer of the packaging machine. In this particular case, let’s say Sajith is the manufacturer of the case-sealing machine in this case. The third party is us, because our equipment actually happens to be the heart of that equipment.

 

In the value of that equipment, the biggest value is the value of adhesive dispensive system. And then the fourth party is the supplier of the adhesive because there are lots of different materials that are used. The right adhesive has to be selected for the right application and so on. 

 

NMD: One of the part is your equipment, the other is the material. In this particular case, it is the hot-melt. One, why hot-melt and no other material? Two, what are the benefits of that?

SD: I would say that in the last 20 years, hotmelt has seen the biggest growth in packaging; it has more or less displaced everything else.

 

Hot-melt adhesives are what we are talking about in India. This is a very sophisticated glue. When you have high-speed machines or high productivity machines, you need to have a product that can cure or complete the bonding process very fast. That’s probably one of the most important reason.

The other reason is that you have the hot-melt adhesives that work on all kinds of substrates and in all kinds of conditions.